Lancaster Surgeon to Pay $4.25 Million to Resolve False Billing and Kickback Claims

PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced a $4.25 million civil settlement with Glenn A. Kline, D.O. and Community Surgical Associates to resolve civil allegations relating to kickbacks received from two hospitals formerly operated by Health Management Associates (HMA) in Lancaster, Pennsylvania, in violation of the False Claims Act and Anti-Kickback Statute. Dr. Kline’s case is related to a larger investigation under which HMA agreed to pay $260 million to the United States to settle claims arising from HMA’s fraudulent billing practices in multiple healthcare institutions across the United States.

Between 2009 and 2012, as alleged in the relators’ complaint, Dr. Kline practiced as a general surgeon in Lancaster, Pennsylvania. Dr. Kline was a major source of surgical business in the Lancaster area. His ability to refer patients to two former HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center, gave Dr. Kline significant leverage over HMA as it attempted to compete in the Lancaster market.

To secure Dr. Kline’s referrals, the complaint alleges that HMA compensated Dr. Kline by paying him exorbitantly more than the fair market value of his services. Dr. Kline was being paid 300% more than the Medical Group Management Association (MGMA) median salary for comparable general surgeons, and no fair market value analysis was done to support this payment. In addition to his excessive salary, Dr. Kline demanded, and was paid, additional amounts to benefit his practice, Community Surgical Associates. As alleged, Dr. Kline was paid these amounts as kickbacks for his referral of patients to Lancaster Regional Medical Center and Heart of Lancaster Medical Center, which in turn billed federal health care programs for those patients’ services. According to the complaint, these arrangements were intentionally structured to disguise payments which were, in actuality, payments for patient referrals, not for legitimate services.

“Our resolution of this matter and the significant recovery we have obtained from this physician show once again that no matter how complex the fraud scheme is, we will find it, stop it, and punish it,” said First Assistant U.S. Attorney Williams. “The alleged improper physician inducements that Dr. Kline demanded, and received, are a form of ‘pay to play’ business practice that could compromise professional judgment. In sum, this conduct must be rooted out because it interferes with a physician’s ability to provide top-notch patient care to American citizens.”

The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. George E. Miller and Michael J. Metts, former HMA hospital executives in Lancaster, filed suit in the Eastern District of Pennsylvania, alleging the improper financial relationship between HMA and Dr. Kline. Mr. Miller and Mr. Metts will receive approximately $1,054,000 million as their share of the recovery. Counsel for the whistleblowers, Marc S. Raspanti, Esquire and Pamela Coyle Brecht, Esquire from the law firm of Pietragallo Gordon Bosick & Raspanti, LLP, worked closely with the United States to investigate and resolve this case. “We sincerely thank Mr. Miller and Mr. Metts. Together with their lawyers, these two citizens provided invaluable assistance to the government throughout this case. Without the willingness of relators to shed light on allegations of fraud, preserving government program funds would be far more challenging. Their efforts played a vital role in the resolution of these cases,” said Williams.

“Today’s settlement highlights our dedication to ensuring physicians are making health care decisions based on their patients’ needs, not illegal inducements,” said Maureen R. Dixon, Special Agent in Charge, Philadelphia Regional Office, U.S. Department of Health and Human Services, Office of the Inspector General. “We will continue to work with the U.S. Department of Justice to safeguard patients and taxpayers.”

This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General. For the U.S. Attorney’s Office, the investigation and settlement were handled by Deputy Chief Charlene Keller Fullmer, Assistant United States Attorney Veronica Finkelstein, and Auditor Dawn Wiggins.

The civil claims resolved by the settlement are allegations against Dr. Kline only, and there has been no determination of liability.